ADVFNI III Morning Euro Markets Bulletin

ADVFN III Morning Euro Markets Bulletin  
Daily world financial news
Tuesday, 14 August 2012

London Market Report
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London open: Stocks gain as German GDP beats forecasts
- German Q2 GDP above forecasts
- Japanese stimulus could be on the agenda
- Standard Life impresses as profits jump

London's FTSE 100 advanced on Tuesday morning after German growth data beat expectations and investors hoped that policy-makers in Japan would step up to boost its economy.

German economic growth slowed down from 0.5% to 0.3% in the second quarter of 2012, but economists were expecting gross domestic product (GDP) to increase by just 0.2%.

France, on the other hand, registered its third consecutive quarter of zero growth although this was better than the 0.1% contraction that the experts were expecting.

Optimism was also being driven by the results of the latest Bank of Japan policy-setting meeting which showed that some board members wouldn't be against future policy options to combat a slowdown. It was revealed yesterday that annualised Japanese GDP increased by 1.4% in the second quarter, well below the 5.5% growth the previous quarter and under the 2.3% expansion expected.

Investors will also be looking ahead retail sales due out in the US later today. According to market analyst Michael Hewson from CMC Markets, the figures "will be scrutinised for any evidence of a change in consumer spending patterns. After seeing retail sales number slide for the last three consecutive months, it would appear that the US consumer is remaining reticent when it comes to parting with their cash dollars."

FTSE 100: Standard Life surges after first-half results

Life assurance behemoth Standard Life jumped as it saw profits rise in the first half after a strong performance in the UK, its biggest market. Operating profit before tax was up 15% to £302m with the firm reporting group assets under administration (AUA) of £204.2bn, up 3% from £198.4bn the year before.

Anglo-Swedish drugs colossus AstraZeneca raised earnings guidance a tad after signing a deal with US pharmaceuticals titan Pfizer, pushing shares higher early on.

Building materials group CRH dropped after poor weather and tough economic conditions in Europe saw earnings slip in the first half of the year. EBITDA fell 1% year-on-year in the six months to June 30th, more or less in line with the company's guidance in May of "close to last year's level".

FTSE 250: Centamin up after record output

Egypt may not have been the most restful place in which to operate in 2012 but Egyptian gold miner Centamin is sticking with its production guidance after second quarter output hit record levels. Shares rose early on.

Scottish distribution firm John Menzies was out of favour after seeing revenues fall in the first half as the firm was hit by tough economic conditions and a weak euro.

FTSE 100 - Risers
Standard Life (SL.) 271.00p +5.57%
United Utilities Group (UU.) 718.50p +4.28%
Severn Trent (SVT) 1,757.00p +2.87%
Evraz (EVR) 275.00p +2.42%
Pennon Group (PNN) 753.00p +2.38%
Johnson Matthey (JMAT) 2,291.00p +1.87%
Vedanta Resources (VED) 995.00p +1.84%
Barclays (BARC) 186.30p +1.78%
Standard Chartered (STAN) 1,356.50p +1.72%
ITV (ITV) 84.45p +1.69%

FTSE 100 - Fallers
CRH (CRH) 1,154.00p -5.33%
Wolseley (WOS) 2,411.00p -1.51%
Kingfisher (KGF) 285.80p -1.07%
Pearson (PSON) 1,222.00p -0.81%
Lloyds Banking Group (LLOY) 31.45p -0.58%
Tate & Lyle (TATE) 663.00p -0.23%
Royal Bank of Scotland Group (RBS) 221.90p -0.22%
Petrofac Ltd. (PFC) 1,484.00p -0.13%
Weir Group (WEIR) 1,726.00p -0.12%
Randgold Resources Ltd. (RRS) 6,275.00p -0.08%

FTSE 250 - Risers
Petra Diamonds Ltd.(DI) (PDL) 101.00p +3.06%
JD Sports Fashion (JD.) 685.00p +2.70%
Savills (SVS) 383.40p +2.40%
Paragon Group Of Companies (PAG) 184.20p +2.33%
Carpetright (CPR) 618.00p +2.32%
Centamin (DI) (CEY) 70.10p +2.11%
Gem Diamonds Ltd. (DI) (GEMD) 194.90p +2.04%
Soco International (SIA) 348.00p +1.81%
Ladbrokes (LAD) 167.80p +1.70%
Barr (A.G.) (BAG) 445.50p +1.69%

FTSE 250 - Fallers
Daejan Holdings (DJAN) 3,105.00p -2.20%
Menzies(John) (MNZS) 620.50p -1.51%
Aquarius Platinum Ltd. (AQP) 36.77p -1.42%
Bumi (BUMI) 358.20p -1.38%
Ruspetro (RPO) 150.00p -1.32%
Bank of Georgia Holdings (BGEO) 1,136.00p -1.22%
Lonmin (LMI) 733.50p -1.01%
Heritage Oil (HOIL) 165.49p -0.96%
Restaurant Group (RTN) 317.00p -0.94%
UK Event Calendar
Tuesday August 14

Anglo Pacific Group, CRH, Dragon Oil, JKX Oil & Gas, Menzies(John), SDL, Standard Life, Tribal Group

Business Inventories (US) (13:30)
GDP (Flash Estimate) (EU) (10:00)
Gross Domestic Product (GER) (07:00)
Industrial Production (EU) (10:00)
Manufacturing Inventories (US) (15:00)
Producer Price Index (US) (13:30)
Retail Sales (US) (13:45)
Retail Sales Inventories (US) (15:15)
ZEW Survey (EU) (10:00)
ZEW Survey (GER) (10:00)

Anglo Pacific Group

NWF Group

Baltic Oil Terminals

ADC African Development Corporation GmbH, Baltic Oil Terminals, Castings, Eredene Capital

Consumer Price Index (09:30)
Retail Price Index (09:30)

Amati VCT 
Europe Market Report
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Europe open: GDP figures a pleasant surprise
European markets have bounced back after yesterday's poor showing, encouraged by indications that the mainland's two biggest economies are in better shape than feared.

Positive numbers

Both German and French GDP figures came in better-than-expected at 0.3% and 0% respectively.

The German pace of growth slowed compared to the first quarter but the outcome was slightly better than the expected figure of 0.2%.

"The robust consumer demand so far this year is very encouraging and should also provide some support to the German economy going forward," said Thomas Harjes at Barclays Capital.

"However, the risk of another soft patch in the second half of 2012 is significant as most parts of Southern Europe remain in recession and overseas demand has also softened lately."

The French economy had been expected to fall back into negative territory.

Although it's slightly depressing to hail such anaemic numbers, it's nice for the beleaguered market to have a positive surprised for a change.

Stat deluge

After Monday was a ghost town in terms of statistical releases, Tuesday will more than make up for the feeling that things were 'quiet...a little too quiet' yesterday.

Traders will turn their attention towards the release of the German ZEW Index of economic sentiment, which recently showed sustained and sharp weakness.

The most recent set of data is expected not to show any major further declines.

Then there will be the Euro-zone GDP and industrial production figures.

Markus Huber at ETX Capital said both were likely to paint a rather somber picture concerning the state of the European economy at the same time increasing the pressure on the ECB to do even more to support growth.

Then in the afternoon US retail sales will take centre stage with the consumer being expected to have staged a moderate rebound after last month's decline.

Company movers

Merck KGaA led the DAX up after the German drugmaker beat forecasts for quarterly adjusted earnings.

It also predicted faster growth in underlying core profit this year based on higher pharmaceutical sales and a strong dollar.

Danish shipping giant AP Moeller-Maersk steamed ahead after it revealed its container line returned to profit in the second quarter on the back of improved freight rates. Sector peer Aker Solutions bobbed higher in sympathy.

DAX - Risers
Merck KGaA 85.40 +3.52%
SAP AG 52.53 +1.43%
Daimler AG 41.38 +1.35%

DAX - Fallers
ThyssenKrupp AG 16.15 -0.52%
RWE AG 32.62 -1.00%
HeidelbergCement AG 39.68 -1.22%

CAC 40 - Risers
ST Microelectronics (STM) € 4.86 +1.72%
Accor (AC) € 27.38 +1.39%
Renault (RNO) € 37.76 +1.38%
Carrefour (CA) € 15.98 +1.33%
France Telecom (FTE) € 11.41 +1.29%
Michelin (ML) € 57.66 +1.25%
Schneider Electric (SU) € 49.53 +1.17%
Air Liquide (AI) € 95.49 +1.13%
Total (FP) € 40.21 +1.13%
Essilor International (EI) € 68.53 +1.08%

CAC 40 - Fallers
PPR (PP) € 127.05 -0.43%
EADS (EAD) € 30.25 -0.40%

US Market Report
US close: Tech stocks shine on mixed day
    Dow Jones: -39 at 13,169
    S&P 500: - 2 at 1,404
    NASDAQ Composite: +2 at 3,023
The winning streak of the S and P 500 index came to an end on Monday but the tech heavy NASDAQ finished marginally higher on a mixed day for equities.

Tech stocks defy the weaker trend

Apple was among the tech stocks making headway as reports of price cuts for its iPhone range pumped up speculation that a new release of the lucrative hand-held communications device is on the way.

Google, which recently bought Motorola Mobility in a move which some saw as an attempt to go head-to-head with Apple in the smartphone market, was another stock on the rise after it announced it would make 4,000 workers at the recently acquired unit redundant.

Two-thirds of the cuts will take place outside of the United States, the firm explained, saying it expects severance-related costs of no more than $275m.

"These changes are designed to return Motorola's mobile devices unit to profitability," Google said in a regulatory filing and added that the unit will place more emphasis on more innovative and profitable mobile devices.

The Internet advertising giant also announced it is to acquire all of the travel-related assets of journals publisher John Wiley, among them the Frommer's brand of travel books. The news was seen as potentially damaging to the business of online travel resource Trip Advisor.

Oil refiner Tesoro has been shopping at BP's garage sale, paying around $2.5bn for BP's refinery and related assets in Carson, California. The shares were the best performers among S&P 500 constituents.

Bank of America failed to hold on to the morning's gains. The stock had initially hardened after the bank it is selling its non-US wealth management operations to Swiss operator Julius Baer.

Retailer JC Penney was off the pace after Piper Jaffray cuts its rating on the stock to "neutral" from "overweight". Broker commentary also weighed on drinks maker Monster Beverage; Goldman Sachs lowered its rating on the beverages sector to "neutral" from "attractive".

Solar panel First Solar was friendless after German peer SolarWorld lowered full-year guidance and reported a big second quarter loss.

Other markets

Crude oil futures had a quiet day, with the September contract for West Texas light sweet crude finishing just 3 cents lower at $92.70 a barrel in New York.

S&P 500 - Risers
Tesoro Corp. (TSO) $38.87 +9.49%
Sears Holdings Corp. (SHLD) $54.36 +5.72%
Sysco Corp. (SYY) $30.14 +4.51%
Salesforce.Com Inc. (CRM) $145.15 +3.80%
International Paper Co. (IP) $33.94 +3.19%
Campbell Soup Co. (CPB) $34.35 +3.12%
eBay Inc. (EBAY) $45.32 +3.02%
Nabors Industries Ltd. (NBR) $15.69 +3.02%
Google Inc. (GOOG) $660.01 +2.81%
Sprint Nextel Corporation (S) $5.05 +2.64%

S&P 500 - Fallers
Brown Forman Corp. Class B (BF.B) $61.48 -33.30%
TripAdvisor Inc. (TRIP) $33.52 -4.50%
First Solar Inc. (FSLR) $20.49 -4.39%
Cliffs Natural Resources Inc. (CLF) $43.30 -3.58%
QEP Resources Inc (QEP) $26.97 -3.51%
Helmerich & Payne Inc. (HP) $48.30 -3.25%
Denbury Resources Inc. (DNR) $15.33 -3.16%
Chesapeake Energy Corp. (CHK) $19.06 -3.15%
Alpha Natural Res (ANR) $7.12 -3.13%
J.C. Penney Co. Inc. (JCP) $22.67 -3.12%

Dow Jones I.A - Risers
American Express Co. (AXP) $56.13 +0.50%
Walt Disney Co. (DIS) $49.86 +0.42%

Dow Jones I.A - Fallers
Alcoa Inc. (AA) $8.83 -1.67%
E.I. du Pont de Nemours and Co. (DD) $50.23 -1.66%
Cisco Systems Inc. (CSCO) $17.34 -1.14%

Nasdaq 100 - Risers
Sears Holdings Corp. (SHLD) $54.36 +5.72%
eBay Inc. (EBAY) $45.32 +3.02%
Google Inc. (GOOG) $660.01 +2.81%
Intuitive Surgical Inc. (ISRG) $508.31 +1.95%
VeriSign Inc. (VRSN) $47.49 +1.56%
Apple Inc. (AAPL) $630.00 +1.34%
Fiserv Inc. (FISV) $70.81 +1.33%
Nvidia Corp. (NVDA) $14.81 +1.29%
Bed Bath & Beyond Inc. (BBBY) $63.54 +1.21%
Starbucks Corp. (SBUX) $46.11 +1.18%

Nasdaq 100 - Fallers
Research in Motion Ltd. (RIMM) $8.07 -2.65%
Avago Technologies Ltd. (AVGO) $36.27 -2.37%
NetApp Inc. (NTAP) $31.81 -2.36%
Check Point Software Technologies Ltd. (CHKP) $50.71 -2.09%
Monster Beverage Corp (MNST) $53.27 -1.84%
Nuance Communications Inc. (NUAN) $23.12 -1.74%
Wynn Resorts Ltd. (WYNN) $100.13 -1.67%
Electronic Arts Inc. (EA) $12.87 -1.61%
Randgold Resources Ltd. Ads (GOLD) $97.89 -1.53%
F5 Networks Inc. (FFIV) $100.72 -1.48%

Newspaper Round Up
Tuesday newspaper round-up: StanChart, Facebook, G4S...
Peter Sands, the chief executive of Standard Chartered, has flown to New York in a last ditch bid to secure a settlement and avoid a public showdown with US regulators over Iranian money laundering charges. The bank boss decided to intervene personally after a weekend of intense negotiations failed to persuade Benjamin Lawsky of New York State Department of Financial Services to water-down his ferocious attack on Standard Chartered. Ms Sands set off to America even though Mr Lawsky continued to leave the bank in limbo over the format of Wednesday's hearing and which executive he wants to appear. [The Telegraph]

Investors in Facebook, still reeling from the social network's disastrous stock market debut, are braced for further losses as the ban on early backers selling their shares begins to lift this week. In a staggered process which begins on Thursday and peaks in November, about 1.9bn shares – four times the current publicly traded number – will begin to be released from "lockup". Facebook's high-profile owners, from Microsoft and Goldman Sachs to U2 frontman Bono's venture capital fund Elevation Partners, will be free to sell the billions' worth of securities they held back from the initial public offering in May. [The Guardian]

G4S's failure to provide enough Olympic security guards has taught ministers that private firms are unsuited to providing many public services, the Defence Secretary has admitted. In an interview with The Independent, Philip Hammond said the G4S saga had caused him to rethink his scepticism towards the public sector – and made him appreciate there were some things that only state organisations like the Army could be relied upon to do. [The Independent]

Ministers are preparing to unveil a new package of measures to stimulate the flagging house-building sector next month, in an attempt to help drag Britain out of recession. The plan has been drawn up by Oliver Letwin, the prime minister's head of policy, along with Grant Shapps, housing minister, and Danny Alexander, chief secretary to the Treasury. It comes amid an unprecedented drive to stimulate housebuilding. Downing Street and the Treasury have instructed officials to come up with initiatives which could boost building by using the government's balance sheet, rather than by putting money upfront. [Financial Times]

Hotel operators across Europe are being forced to cut room rates to attract guests as the eurozone crisis hits corporate budgets. According to a biannual survey by Hogg Robinson Group, one of the world's biggest business travel companies, average room rates fell in several leading cities in the first half of this year, with Barcelona down 22 per cent and Munich down 15 per cent. Other eurozone cities under pressure included Dublin and Madrid, where the price of a room fell by 6 per cent and 2 per cent, respectively. Hotels in several destinations reported rates no better than flat. [The Times]

Inflation fell further in July, easing the pressure on household budgets, official figures are expected to show on Tuesday morning. The Office for National Statistics is forecast to say at 9.30am that annual inflation fell to 2.3pc in July from 2.4pc in June, driven lower by food and petrol prices. [The Telegraph]

Senior executives of pan-European defence group EADS were alerted five years ago about questionable payments made by one of its subsidiaries in Saudi Arabia to an account in the Cayman Islands that is now the subject of a criminal probe by the UK's Serious Fraud Office. [Financial Times]


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